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Economic reality strikes Goldman Sachs

In a year when their company’s stock has dropped more than 60 percent and the firm is expected to post its first quarterly loss since it became publicly traded, the top executives at Goldman Sachs Group Inc. have decided to do something different. They have asked the firm’s board of directors to grant them no bonuses this year.

That means the seven top executives will have to scrape by on their salaries of $600,000 a year. And Chief Executive Officer Lloyd Blankfein won’t receive an estimated $68.5 million in cash and stock bonuses, as he did last year.

Hey, times are tough for everyone.

This newspaper has not been among those who loudly decry high executive pay and hefty bonuses paid to the leaders of large, private corporations. Companies have the right to pay what they believe is needed to obtain and maintain top leadership.

However, it is economically foolhardy, not to mention a horrible public-relations blunder, to reward executives with high salaries, even higher bonuses and golden parachutes for bad management decisions that push their firms to the brink of bankruptcy or, in too many cases recently, over the edge.

We’re glad to see the leaders of Goldman Sachs recognized that and we hope many more companies and executives with follow their lead.